Company, or the debts of the Peninsular and Marquette Railroad of Michigan, or any other railroad. We say that the Galena and Chicago Union Railroad Company was never organized for any such purpose or object whatever, and each and all of such acts are inconsistent with the purpose of that company, and no act or vote of the majority, whether by person or proxy, can legalize such acts, or render consistent, what is clearly inconsistent. See Nazro et al. v. Merchants Mutual Ins. Co., 14 Wis., 196. This was a case where one Henry Nazro, a stockholder in the Merchants Mutual Insurance Company, of Milwaukee, filed a bill in behalf of himself and of all others similarly situated with himself, against the company, in which he alleged, first, that he became a stockholder in the company, as it was organized under an act of the legislature, of February 10, 1847. That after he became a stockholder that the company procured two amendments to their charter, one in 1858, and one in 1860, which acts were accepted by the company, against his protest, and which latter act of 1860, authorized an entire reorganization of the transacting of insurance business on entirely different principles from the original charter, in which he took stock. It further appeared, that the dissenting members of the corporation procured an act from the legislature, in the month of April, 1860, by which it was provided, on the application of those interested in the old company, appraisers might be appointed to examine the affairs of the company, and appraise the value of the property and assets of the company, which it owned at the time it was reorganized. And after such examination, they should report to the court the value of the same, and a judgment entered in favor of the petitioners for their por portionate and respective shares of the entire property. The court, in deciding this case, say that, "the capital stock of incorporated companies is a trust fund, the proper application of which courts of equity will enforce, by virtue of their jurisdiction over trusts and frauds." * "That the grant to the directors and the company, of new and distinct powers, such as are contained in the amendments to the original charter, were * * * such as they could not have exercised, either as a matter of corporate authority or of legal or constitutional right, as between themselves and the shareholders, and that the shareholders might have objected to it, as a violation of the contract under which they became members of the corporation.' The majority of the stockholders and directors complained bitterly of the minority; and their acts in the premises were characterized as willful and uncompromising, and the act under which they proceeded, as most harsh and oppressive. But the court said, that "the trustees and assenting members, or, what is the same, the company under its new organization, being themselves the innovators, and having set on foot, themselves, measures by which the dissenting members have been deprived of the chartered rights and privileges, on the faith of which they invested their money, ought not to object to any fair proceeding by which they seek a return of it. Their claims are most equitable, and every principle of natural justice would seem to require that they should be protected. The amendatory acts were, in effect, a grant of authority to the trustees to organize a new company for the same general purpose, but upon entirely different principles, with the privilege of such members of the old company, as wished, to convert their premium certificates into the stock of the new. The new company was to take the place of the old, which was to cease, and such holders of premium certificates as refused to convert them into stock, were to have no management of its affairs. The result is, that the new organization has, without their consent, become possessed of so much of the funds of these dissenting certificate holders, which it is against conscience for it to retain. The act, therefore, is nothing more than a special remedy to enforce the performance of a duty, which courts of chancery, upon principles of natural equity, would have enforced without it." It is a proceeding, on the part of the dissenting members, to get their own. The trustees, by their conduct, have made a distribution necessary and proper. They have appropriated the property without the consent of the owners. Const. v. Harris, 1 Turner & Russell, 496. Great Western v. Rushout, 10 Eng. Law & Eq., 72. Attorney General v. Norwich, 9 Eng. Law & In the case of Ward v. Societies of Attorneys, 1 Collyer, 375, it appeared that out of one thousand three hundred and thirteen shares, all voted to acquiesce in an important change to the charter, except the owners of twenty-one shares. They filed their bill, and the court enjoined the directors and corporation. It was argued, in this case, that it was unreasonable that the wishes of the great majority of the members of this society should be thwarted by the proceedings of a few individuals; it is more to the interest of the society that it should be devoted to professional improvement, than it should be engrossed in considering the profits of the shares. In the former case, it may command the confidence of the public, but in the latter, it cannot. Notwithstanding this argument, the vice chancellor, on page 380, said, that "THE LAW allows individuals to acquire a beneficial interest in the preservation of such a body, so lawfully constituted, and I am not aware of any principle of law or equity which can enable that lawfully constituted interest, thus obtained, to be taken away without the consent of every person interested, unless by means of a condition, to which the original creation was subject." NOTA BENE.-Preston v. the Grand Collier Dock Co., 11 Simons, 327. This was a case where Preston, the owner of twenty shares out of nine thousand, brought a suit against the Grand Collier Dock Company, and various other persons, and the court held, that a bill, by a member of a numerous incorporated company, on behalf of himself and all the other members, except the defendants, praying that a transaction in which the defendants had been the actors, but which had been sanctioned, unanimously, at a meeting of the company, might be declared null and void, was sustained, although some of the members, on whose behalf the bill was filed, had been present and voted at the meeting. "The minority of the shareholders, or one of them, may file a bill on behalf of the whole body, though at a meeting a large number may have sanctioned the act, if it be illegal; if not, it would be impossible for a shareholder, in such a case, to obtain relief, that does not apply to the other part of the objection, that the directors are not made the defendants." Parker V. C. In case of Winch v. the Birkenhead, Lancashire & Cheshire Junction R. R. Co., 13 L. & Eq., on page 518, he said, 19 Eng. L. & Eq., 361: "I think that this bill is correctly framed by one, on behalf of himself and all the other shareholders. It is not necessary to refer to any authority, further than the very forcible language of Lord CRANWORTH, in the case of Beman v. Rufford, 1 Sim. (N. S.), 550, in which it is said, that any one shareholder may come, in behalf of all, to prevent, what he calls, an infringement of the law of the concern. I do not think it is necessary that the directors should be made parties. The act that is sought to be restrained is, the the act of the company. It is quite sufficient if there is an order restraining the company. The company, itself, cannot act, except by means of its officers. "It appears to me that the suit is properly framed, by the relief being sought against the company alone." Bagshaw v. the Eastern Union Railway Co., 7 Hare, 114; 2 Mac. & G., 389. Bromley v. Smith, 1 Sim., 8. Preston v. the Grand Collier Dock Co., 11 Sim., 327; 1 Stockton, 401; 13 Barb., 567. Ward v. the Society of Attorneys, 1 Coll,, 370. 11 Georgia, 569. 31 Ala., 612. 28 Penn., 379. 1 R. I., 312. Angel & Ames on Corporations, Sec. 312. 40 N. H., 540. 33 Maine, 132. 21 N. H., 81. 24 Barb., 187. 43 N. H., 517. The principle is, that any shareholder in a corporation may sue to prevent the corporation from doing an act ultra vires. 1 Chand., (Wis.,) 286. 15 Ill., 255. The case of Dodge v. Woolsey, 18 How., 341, is directly in point. 30 Penn., 1. 28 Penn., 379. Adriance v. Mayor of N. Y., 1 Barb., 19. Wood v. Draper, 24 Barb., 190. Christopher v. Mayor of N. Y., 13 Barb., 567. 23 How., 396. A single shareholder can enjoin a corporation, when it is misapplying its funds, or violating its charter. In ex parte Booker, 18 Arkansas, 338. This was an application for a mandamus to compel the judge to grant an injunction against the officers of a railroad company, for violating its charter, in appropriating funds to different purposes than those contemplated by the charter. Justice HANLY says: "It was a question of serious doubt, until comparatively a recent date, whether a private corporation could, under any circumstances, be sued, either at law or equity, by one of its own members." (See 2 Bay. (S. C.) R., 109; 1 Myl. & Rup. Ch. R., 131, and note, and 18 How. U. S. R., 331.) |